Bridport Golf Club wins ECJ VAT fee case

21st Jan 2014

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Golf clubs around the UK got an extra present just before Christmas when the European Court of Justice (ECJ) ruled that Bridport and West Dorset Golf Club did not have to pay VAT on green fees collected from non-members.

In a decision dated 19 December, but issued without a supporting opinion, the court resolved issues that had been referred to it by a UK upper tier tribunal judge because of the “general importance in the community” about how exemption from VAT was applied to amateur sports clubs...

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Under the proposed new rules governing CASC, golf clubs with turnover over £100,000 are being forced to consider incorporating trading companies in order to hive down trading activities such as the green fee income and bar trading in order to retain their CASC status. It must surely follow that such trading companies will not be "non-profit" organisations as envisaged by the ECJ, and, accordingly, that green fees will continue to be standard rated supplies in these new companies. The alternative is for clubs to abandon their CASC status, but they will then become very largely VAT exempt businesses (except for bar trading), with the consequent loss of all course running costs input VAT. Green fees will have to continue to be charged as if VAT inclusive in order make good the shortfall of partially exempt input recovery on course expenditure. A further thought is whether this would increase HMRC's unwillingness to repay past VAT under the unjust enrichment rule.

It occurs to us that if you have been charged VAT on a green fee when playing at a Golf Club, you should, as an individual or group (visiting societies) also be able to reclaim the VAT charged by the club to you.

It should not just benefit the club, who, as it turns out, charged you in error.